Augmented reality (AR), the less immersive cousin of virtual reality (VR), is taking off.
And the retail sector is becoming one of its primary real world test beds as brands begin to realize the tremendous potential AR has to transform the shopping experience.
While virtual reality requires specialized electronic equipment like a headset or goggles to simulate a completely alternate visual environment, augmented reality merges digital components with real-life objects in a way that they enhance one another but are still obviously distinct, using just a smartphone or tablet. Take the Pokemon Go craze which swept the world last year and saw a host of retailers requesting Pokéstops as a new way to connect with consumers.
“AR has particular potential in the retail sector, where the technology introduces a new level of interaction between the product and the consumer,” says Taylor Coyne, Senior Research Analyst at JLL. “By allowing consumers to view and test products virtually through their smartphone’s camera, it enhances the shopping experience and it’s already proving to be a game-changer for cosmetic, home goods and apparel retailers.
Usage is expected to continue to grow and expand: According to the Harvard Business Review, investments in AR and VR by the retail industry could reach $30 billion by 2020.
Augmented reality in action
Some brands have been quick to adopt the new technology. Sephora’s Virtual Artist app uses augmented reality to allow shoppers to virtually apply makeup and learn new makeup techniques without ever stepping into a store. They can then seamlessly add those products to their shopping cart and purchase through the app.
Home improvement retailer Lowe’s is launching an AR app that gives shoppers virtual store directions on their phone screens. The app uses Google’s indoor-mapping technology, called Tango, to overlay a yellow line down the aisles that guides people to the exact location of each item on their shopping list. Getting lost in a sea of appliances, paint and patio furniture will soon be a thing of the past.
Home goods retailers are rolling out platforms that use AR to virtually place an item like a couch or lamp in a shopper’s home so they can visualize what the piece would look like in their own home. Pottery Barn will leverage Google’s Tango technology for its forthcoming 3D Room View app, which will let a user virtually furnish any room of their house with any Pottery Barn product they choose. Similarly, IKEA has announced a collaboration with Apple on an app that lets shoppers try many different “products, styles and colors in real-life settings with the swipe of a finger.”
And there is plenty of buzz of other retail segments adapting AR technology to increase convenience and personalization for their consumers.
Grocery retailers, for example, are exploring AR as a solution in their quest to satisfy the preferences of increasingly diverse shoppers. As AR glasses become less expensive and more widely available, supermarkets may use them to virtually remove products from a shopper’s view so that they can only see items on the shelf that they are looking for. So, if a shopper is searching for gluten-free crackers, they can be highlighted in the aisle while other, non-gluten free products fade out of vision. Or, if someone is looking to try a new recipe, AR can guide them to quickly and easily find all of the ingredients needed. It might even suggest a wine that would pair well with the recipe.
Benefitting both the customer and retailer
While many retailers today have both online and offline operations, they each have different appeals. Yet AR brings some of the best aspects of online shopping to physical stores – namely, better communication, more personalization and ultimately deeper engagement.
“As consumers’ demand for convenience and customization grows, augmented reality couldn’t come at a better time for retailers – particularly as many brands within the industry competes with pureplay ecommerce,” says Coyne. “The technology may offer brick-and-mortar stores a competitive advantage by allowing them to blend digital and physical shopping in a way that creates a completely unique experience.”
And by enriching the interactions that customers have with physical products, brands can potentially boost sales and brand loyalty.
One other big advantage of the roll-out of AR is the opportunity for retailers to collect extensive data on the consumers interacting with their brand, as these platforms involve a significant degree of access to personal information. For consumers, it could mean a better shopping experience with their favorite brands.
“As technology advances and AR becomes more powerful, we can reasonably expect to see an even higher level of personalization of the in-store experience,” says Coyne. “There is no doubt that technological innovations will continue to play a huge role in how consumers experience retail.”